Todd Salamone of Schaeffer’s Investment Research sounds bullish in his latest commentary.

“Despite weak economic reports — including lower-than-expected gross domestic product (GDP) data — and persistent warnings from market technicians that low volatility is indicative of complacency in the marketplace, U.S. equities displayed some resilience this past week, when various headlines could have easily shaken market participants,” he writes.

Salamone also says: “We continue to favor U.S. stocks, so maintain long exposure, and view pullbacks as buying opportunities.”

A gauge of pending home sales jumped 6.1% in May to reach the highest level in eight months, signaling that upcoming closings of existing homes are likely to speed up, reports MarketWatch’s Ruth Mantell.

Forecasts were just for 1.1% growth, according to the WSJ.

The S&P 500 has gone green and jumped to a session high since this report came out.

Airline, pharmaceutical, and utilities stocks were the big winners in the first half of 2014 — a period marred by bad weather, a drop in first-quarter GDP and a drop in Treasury yields, reports MarketWatch’s Wally Witkowski.

He also writes:

“Of those three, pharma stocks are expected to hold firm given a recent wave of mergers and acquisition activity, said Brian Belski, chief investment strategist at BMO Capital Markets. Airlines and utilities face a more uncertain future.”

Oil futures on Monday continued to give back the fear premium on growing confidence Iraq’s oil exports will remain insulated from the turmoil, but prices were still on track to log gains for the month and quarter.

Nuclear threats aside, investors should bet on Korea and Israel for the long term as they both have the potential to grow rapidly until the end of the decade, said Ronnie Moas, founder of Standpoint Research.

“I was extremely impressed during my June trip around the world with what is going on in Israel … the South Koreans had me speechless and in awe. I don’t know why anyone would bet against either of these countries. They have both outperformed during the last ten years and will continue to outperform during the next ten years.”

If there’s one thing that’s characterized this long-running bull market, it’s probably its inherent level of self doubt. That’s still in place as investors prepare to wrap up another winning quarter. Jerry Webman, chief economist at Oppenheimer Funds, says skeptics still abound but wonders whether what they’re really afraid of is merely “fear itself.”

He writes:

Bears point to an array of indicators purporting to show dangerous levels of speculation, from low levels of volatility to high levels (in absolute terms) of margin debt.

For the record, I think volatility is low mainly because, faced with average valuations, the prospect of low rates for a long time and a gradually improving economic outlook, investors generally don’t want to buy or sell most asset classes in great quantities at current levels. I’d also note that the ratio of U.S. margin debt to market capitalization has barely budged in about seven years.

The larger point is that while it’s foolish to ignore potential signs of excess wherever they may be, it’s also foolish to ignore the likely effects on asset prices of reasonable valuations, decent global growth prospects and highly supportive central bank policy.

Market strategists have been saying for a while that Corporate America is long overdue to spruce up its infrastructure, and that when that happens, industrials and other B2B companies will reap the benefits. Plus, all that capital expenditure spending will be great for the economy.

Earnings season will start next week and so far there haven’t been a great number of negative pre-announcements, but everything is relative.

From John Butters, senior earnings analyst at FactSet:

Since hitting a peak in negative EPS guidance in Q4 2013, companies in the S&P 500 have issued fewer negative EPS preannouncements and more positive EPS preannouncements for the second consecutive quarter. For Q2 2014, 84 companies have issued negative EPS guidance and 27 companies have issued positive EPS guidance.

The number of negative EPS preannouncements is below the record high of 95 set in Q4 2013, and the number of positive EPS preannouncements is above the record low of 17 also set in Q4 2013.

Despite the positive shift in Q2, it is important to note that the number of negative EPS preannouncements for Q2 is still above the 5-year average (70), and the number of positive EPS preannouncements is still below the 5-year average (37).

Randy Frederick, Managing Director of Trading and Derivatives at the Schwab Center for Financial Research, wrote in emailed comments:

As we enter a short trading week and mark the official end of the first quarter today, traders should continue to watch for signs of the market being slightly overextended and opportunities to take profits in the event of a small near-term pullback in the SPX.

Though all signs point to the bull market continuing through the fall, Randy expects these recent smaller pullbacks to continue and cautions shorter-term traders to wait for a couple of days of stabilization before putting their cash back to work.

Despite a significant downgrade in Q1 GDP last week, the market did not react much and is instead looking ahead to Q2. If historical patterns are any guide, Randy notes that we can count on either a big jump in GDP or a sizable correction in the equities market. The consensus is clearly on the former with Q2 estimates now running about +4.0%. Should these estimates be wrong, a 10% correction in the SPX may not be out of the question.

Tracking the most-active contracts, gold futures climbed 6.1% for the month to mark the biggest monthly gain since February. They were also up 3% for the quarter.

“Investors will remain cautious as there will be a lot of U.S. data out in the next 3 days,” said Chris Gaffney, senior market strategist at EverBank Wealth Management. The focus will be on Thursday’s employment data — the weekly jobless claims figures and June’s nonfarm payroll data, he said.

Oil futures on the New York Mercantile Exchange settled with a minor loss for the session, but scored their biggest quarter gain since the third quarter of last year as traders continued to closely watch Iraqi production.

August oil
/quotes/zigman/2196851/delayedCLQ4 fell 37 cents, or 0.4%, for the session to settle at $105.37 a barrel on Nymex. Tracking the most-active contracts, prices gained 2.6% for the month and rose 3.7% for the quarter.

The S&P 500 is dipping in and out of negative territory, while the Dow Industrials has be in the red most of the session.

The Nasdaq Composite is hanging onto modest gains.

In political news, President Obama is speaking at the White House about immigration. He is expected to use executive action on immigration. Here are headlines from MarketWatch’s Washington DC reporters:

Obama: Will fix as much as I can on my own

Obama: America cannot wait forever on immigration

Obama: Prefer permanent fix of immigration

Obama: Immigration system so broken rules unclear

Obama: Central American children will be sent home

Obama: Now there is humanitarian crisis on border

Obama: Has tried not to pressure House Republicans

Benchmark interest rates are lower than where they started 2014. The market strategists at Nomura Securities have an interesting chart that explains one of the key underpinnings of this consensus-defying performance.

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